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Old 08-30-2010, 09:00 PM   #91
roadtripper
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I am a saver and a budgeter, but in the early years of our marriage, when we had two small children and I was a SAHM, one of DH's friends was getting married in Bermuda. My knee jerk reaction was "We can't afford it." My mom, who is VERY frugal said "that's what credit cards are for--go!" We went for three nights and had a ball. Mom was right--and it didn't turn me into a plastic loving fiend. We didn't have the money, and paid it off in several months, but it was worth it.

So "afford" is relative, as many posters have remarked. I would never charge clothing, electronics, etc if I couldn't pay for them, but memories are worth spending for, IMHO.
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Old 08-30-2010, 09:55 PM   #92
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As all the previous posts have summerized, "can we afford it?" is going to be different for everyone depending on the financial situation they may be in or have been in in the past.

The one thing I can be sure of is that we definatley view being able to afford it differently now than two years ago. Just like some others on this board we have gone through a very difficult time with losing both of our jobs 1.75 years ago. We had to make some hard decisions in order to survive at that point, even though we had the "alloted" six months of emergency funds. Before that time we always felt we could afford the vacation because we had seven months of cash in the bank for emergencies and two very good paying jobs and credit cards to cover it.

After the job lay-offs we had to downsize, sell off some of our property, and budget, budget, budget. That meant making several sacrifices that we have now learned to live with quite comfortably.

Now we have two very good paying jobs again, I just gave up a second part-time job, and my DH is still working a second job. We are still living frugally, not because we have to but because we now choose to. With those choices and the way we are budgeting we are able to "afford it" again. But we eliminated that credit card debt that got us into trouble when we lost our jobs. We have also changed our views on what we can afford. For us, we will save up and only go when we can pay for a vacation with cash using our debit card. If we choose to eat mac-n-cheese instead of steak and lobster in order to make it more affordable then that is our choice. It just shows we are willing to make some sacrifices in order to reap the rewards later at WDW. And I will always look to others here for ideas on how to make extra cash for that vacation or other purchase we may hope to make in the future. It is all part of the fun to see how much we can save or earn using other's clever ideas.

Long story short, now that we have learned a few very hard lessons, it will be cash or wait until we have the cash. If it is not paid for before we go, then we will not go.

Hopefully, we will never experience two job losses at the same time ever again. Even 7 months of savings was not enough to get us through without making some major changes in our spending and choice of life style.
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Old 08-31-2010, 12:01 AM   #93
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For me "affording it" means:

1. We have no debt other than mortgage.
2. Our mortgage debt is less than 10% of our take home pay.
3. 15% of our gross income is going into retirement.
4. We have at least 6 months of expenses in savings.
5. We could easily pay our bills on 1 income, even though we have 2.
6. We have well funded college accounts for the kids.
6. After all of that, if we have enough money in savings to pay cash for "it" then we can "afford it".

If I had credit card debt, consumer debt or car payments, well that's my definition of "not affording it".
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Old 08-31-2010, 05:13 AM   #94
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Quote:
I get this. We live in Tampa now, so we go to DW fairly often. My daughter is a seasonal cast member, so we get in for free and generally don't stay overnight.

Like you, I have not been on a "real" vacation in a couple years. But, if I put all the overnighters and one day trips that we have taken to DW/Universal this last year in my signature, it would look like I spend every penny I have on vacations!
Would putting next to those dates that we didnt pay for it...would that change anything?

I love my younger cousin, but really, being attached to a 4 year old for 24+ hours makes me NEED a vacation...haha. Basically, I'm the babysitter.

I consider those the same thing as when I took my best friend who was out here for 4 days to a nice hotel in Beverly Hills for the night. It was a "trip", not a vacation. Her entire 4 days out here would be considered a vacation. But that one night into beverly hills was a trip. Not a real vacation.

And to the PP who said I was complaining...get off your high horse. I wasnt complaining about anything. Has it been a bummer that we have not been to WDW in 3 years after having gone every year since 2001...yes. Most people here problem understand that sentiment....goign to your favorite place ever year and all of sudden not knowing when you will be able to go again. But I wasnt complaining. I was EXPLAINING why we have not had the $5000 necessary to pay for a WDW vacation in the past 3 years. The OP asked what we mean by "afford it" and in our family that means vacations paid in cash and I was explaining some life curveballs that have been thrown our way (good and bad) that have kept us from being able to "afford it".

Thank you to all the other posters who didn't attack me and who understand what I was talking about. I didnt even think of those trips causing a controversy...If I had thought of that, I would have explained it in my first post.
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Old 08-31-2010, 06:57 AM   #95
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I wish our mortgage were less than 10% of our take home pay. We weren't of that mindset when we purchased this house. We moved from a very high COL to a lower COL area and comparitively....this house was "cheap." But looking back, we wish we had bought less.

Now, question......is less than 10% on a 30 year note or a 15?

We just refinanced last year to a 15 year note. At least more than 50% of our payment is now going into principle.

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Quote:
Originally Posted by sameyeyam View Post
For me "affording it" means:

1. We have no debt other than mortgage.
2. Our mortgage debt is less than 10% of our take home pay.
3. 15% of our gross income is going into retirement.
4. We have at least 6 months of expenses in savings.
5. We could easily pay our bills on 1 income, even though we have 2.
6. We have well funded college accounts for the kids.
6. After all of that, if we have enough money in savings to pay cash for "it" then we can "afford it".

If I had credit card debt, consumer debt or car payments, well that's my definition of "not affording it".
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Old 08-31-2010, 07:40 AM   #96
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Quote:
Originally Posted by sameyeyam View Post
For me "affording it" means:

1. We have no debt other than mortgage.
2. Our mortgage debt is less than 10% of our take home pay.
3. 15% of our gross income is going into retirement.
4. We have at least 6 months of expenses in savings.
5. We could easily pay our bills on 1 income, even though we have 2.
6. We have well funded college accounts for the kids.
6. After all of that, if we have enough money in savings to pay cash for "it" then we can "afford it".

If I had credit card debt, consumer debt or car payments, well that's my definition of "not affording it".
Then I can't afford anything!
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Old 08-31-2010, 08:08 AM   #97
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Originally Posted by punkin View Post
Then I can't afford anything!
Not living where we live, right Punkin! I wish mine was only 10% of our take home pay but when you live near DC, that just doesn't happen. But we did make sure we didn't buy "house poor" and put 35% down when we bought.
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Old 08-31-2010, 08:23 AM   #98
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We're a little weird/different in this category. We have no debt at all. We have no kids. And we have a nice double income that allows us to save 60% of our net income. We've been saving a minimum of 20% towards retirement for 20 years and that percentage has gone up as our incomes have gone up. We live very comfortably on the 80K that's left over.

And so we set those strict parameters....save 60% for retirement. Then with the remaining 80K we sit down at the beginning of the year and lay out a plan for how to spend it. First come monthly bills (insurance, taxes, utilities and groceries). With the pile that's left we determine if we have any large discretionary expenditures (like a guitar for my husband or a computer for the house), then vacation spending for the year. And what's left is carved up into 12 pieces for monthly discretionary spending.

Obviously, we're fortunate, and if we had mortgage debt, car debt and a couple of college funds to deal with....we'd never be able to do 60%. But we're motivated to *try* and retire early. Although, even with a nice portfolio, with the way the world looks these days and what may be coming, I'm not sure if that will happen or not.
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Old 08-31-2010, 08:56 AM   #99
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Originally Posted by Swimalie View Post
Not living where we live, right Punkin! I wish mine was only 10% of our take home pay but when you live near DC, that just doesn't happen. But we did make sure we didn't buy "house poor" and put 35% down when we bought.
Yes, we put down a big down payment when we bought but definitely not enough to get us an under 10% payment.
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Old 08-31-2010, 09:56 AM   #100
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Originally Posted by punkin View Post
Yes, we put down a big down payment when we bought but definitely not enough to get us an under 10% payment.
Same here, we put 20% down and the payment is 25% of our current take home pay, I thought we did pretty well at the time. Of course housing crashed so our equity was wiped out, but odds are well could sell the house for about what we owe on it, if we're upside down it isn't by much. If it wasn't for that down payment we'd be up a creek for sure!

As for "afford it", well my goal is to be consumer debt free in the next three years, we've been trying to pay down our debt for the last 5 years with only limitted success (case in point, the month after we paid off my DH's truck it needed a $6k repair, so the truck payments now go to pay off the repair rather than as extra to our CC payments. DH also took a pay cut at work and I didn't get a raise last year). However, meanwhile we don't want to cut out everything in life, so we still have cable, we still eat out once a week. My brother got married out in AZ this spring so we addeda 4 night trip to DLR to the front end of that. In theory we can't "afford it" because we have consumer debt, but both DH and I have learned through life experiance that if you put things off for too long, you may never get the chance to enjoy it later one (his father and my mother both died relatively young). So while our goal is to eventually be debt fee, we are taking a bit longer to get there than we might otherwise do.
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Old 08-31-2010, 10:22 AM   #101
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Afford it, to me, means pay for it all with cash. If we don't have the cash we don't go or don't buy whatever it is. We refuse to put things on plastic or finance anything. Why go into debt if you truly don't have to?
putting something on plastic doesnt necessarily mean you are going into debt.
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Old 08-31-2010, 10:51 AM   #102
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putting something on plastic doesnt necessarily mean you are going into debt.
I should have phrased that better. What I was trying to say is that we don't put anything on plastic if we don't have the cash in hand to match. For instance, a couple months ago I found a good deal on a DSLR on Amazon. I put it on the CC and when the bill came in I paid it off. If I didn't have the cash to do that then I wouldn't have gotten it. To me, that what afford means .
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Old 08-31-2010, 01:02 PM   #103
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Quote:
Originally Posted by sameyeyam View Post
For me "affording it" means:

1. We have no debt other than mortgage.
2. Our mortgage debt is less than 10% of our take home pay.
3. 15% of our gross income is going into retirement.
4. We have at least 6 months of expenses in savings.
5. We could easily pay our bills on 1 income, even though we have 2.
6. We have well funded college accounts for the kids.
6. After all of that, if we have enough money in savings to pay cash for "it" then we can "afford it".

If I had credit card debt, consumer debt or car payments, well that's my definition of "not affording it".
I really don't see how having a car payment means you can't take a vacation. Not everyone has the ability to pay cash for high ticket items. You are very fortunate.
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Old 08-31-2010, 01:57 PM   #104
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Quote:
Originally Posted by Nayan View Post
I should have phrased that better. What I was trying to say is that we don't put anything on plastic if we don't have the cash in hand to match. For instance, a couple months ago I found a good deal on a DSLR on Amazon. I put it on the CC and when the bill came in I paid it off. If I didn't have the cash to do that then I wouldn't have gotten it. To me, that what afford means .
Same here, Nayan. I put several things on my CC when we bought our house. My plan was to use our tax credit refund to pay it off, but the IRS didn't process my filing. When I finally got my refund, I paid off the CC. I still had to make 3 payments with interest though.
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Old 08-31-2010, 02:10 PM   #105
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its all very confusing! Like for example, I have savings and such ( 911 fund, 529 for son,and i just started a new car fund) .
But lets say I want to plan a trip to disney right now for 2000.00, I have that in my checking account and my bills are paid for the month.. however, I drive a 2005 car with 110,000 miles on it. I prob should replace it.. But i haven't saved enough to buy a new one yet ( I don't do car payments) based on that info I really can't afford anything till i have a newer car.. right? wrong? maybe.. I really don't get it either.. lol

also i have friends who never have money for anything .. aka ' want to do lunch.. no I'm broke" yet they drive 60,000 dollar suv's and live in 400,000 dollar houses.. clearly when they say afford they mean " want to spend money on "
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